The Great Compensation Debate
Financial services planning opens up significant opportunities for accounting firms to generate more revenue and build deeper relationships with their clients.
When you offer a one-stop shop, you can add wealth management options into your services to break free from tax season reliance.
In our recent article, we discuss the debate over financial services pricing - one of the biggest decisions you’ll make.
Financial Services Pricing: Fee vs. Commission Pricing
Wealth management is a $29 trillion industry, yet many professionals are uncertain of how to charge for their services. Typically, compensation comes down to one of two main methods:
- Fee-based pricing charges either a flat fee, hourly fee, or on a retainer. They can also be based on a certain percentage, such as the percentage of assets under management or a percentage of net worth. The initial costs for these services are normally higher, but they may be more affordable for the client over the long term.
- Commission-based pricing often involves charging a certain commission on the services offered. Costs are normally higher in the initial stages for the client and lower long-term.
- Asset-based charges where the client pays an ongoing fee usually based as a percentage of the assets managed.
Which method is suitable for you? It depends on the services you offer. In many cases, pricing is mixed over time to be affordable for the client yet profitable for your accounting firm.
You’ll also secure long-term clients and help boost revenue outside of tax season by offering your clients financial services.
Financial services pricing can be complicated, and a lot of thought needs to go into choosing a compensation model that works best for you. On top of this, you must always be transparent with the pricing, fees, and commission you receive for the services you provide.
Read the full article to learn more about our thoughts on the great compensation debate.
If you need help with figuring out the best compensation model for your firm’s financial services or if you need help getting started offering financial planning services to your clients, please contact us.
